Overview
Since the Report − 12.5%
Revenue grew 379.3% year over year, EPS beat the estimate by 6.6%; the stock rose 0.4% in its first reaction.
- RevenueQ4
- $54.23B
- ▲ 379% YoY · Beat Estimate by 6.4%
- EPSAdjusted
- $33.42
- Estimate $31.35 · 6.6% Beat
Verdict
BUYMicron beat on revenue, earnings and guidance at once: $54.2B in revenue, $33.42 in adjusted EPS and a record $61.5B first-quarter target. The stock first rose 2.2% after hours, then gave it back during the call; the 86.25% margin target came in below what the market wanted. The one thing to watch now is whether Q1, which management calls the margin floor for the year, really is the floor.
Close on Report DaySep 30
$1,065.11▲ 0.4%Report-Day Move
- Market Cap(Today)
- ≈ $1.05 T
- 1Y Return(At Report)
- + 537%
- P/E(At Today's Price · $75.51 · Trailing 12M)
- 12.3
- PEG(Next Twelve Months)
- 0.11
- Net Margin(Trailing 12M)
- 63.8%
Earnings Summary
In 30 Seconds- Revenue of $54.23B beat expectations by 6.4%, and adjusted EPS of $33.42 beat by 6.6%.
- The Q1 revenue target of $61.5B beats expectations by 8.2%; the weekly run rate rises about 22%.
- The stock first rose 2.2% after hours, slipped during the call as the margin target fell short, and ended the after-hours session up 0.4% at $1,069.
The Numbers
Adjusted Gross Margin
87.0%
Record · Target ~86% · ▲ 41.3 Pts YoY
Stock Reaction
▲ 0.4%
20:00 ET Close · $1,069 · Peak 2.2%
Q1 FY27 Revenue Target
$61.5B
Estimate 56.85 · 8.2% Above
Free Cash Flow
$33.20B
Net Cash $68.3B
Quarterly Revenue ($ Billion)
11.32
Q4 FY25 · $11.3 B
13.64
Q1 FY26 · $13.6 B · QoQ + 20.6%
23.86
Q2 FY26 · $23.9 B · QoQ + 74.9%
41.46
Q3 FY26 · $41.5 B · QoQ + 73.7%
54.23
Q4 FY26 · $54.2 B · QoQ + 30.8% · YoY + 379.3%
60.0–63.0
Q1 FY27E · 60.0–63.0 · QoQ + 13.4% · YoY + 350.8%
- Q4 FY25
- Q1 FY26
- Q2 FY26
- Q3 FY26
- Q4 FY26
- Q1 FY27E
Q1 FY27 Company Guidance
- Revenue60 – 63 billion60 billion63 billion
Midpoint 61.5 · Market Expectation 56.858.2% Above Estimate ▲
- Weekly Revenue Run Rate4.73 billion
13 Weeks · Q4 Was 3.87 Over 14 WeeksWeekly Rate Up 22% ▲
- Adjusted EPS37.15 – 39.15 $37.15 $39.15 $
Midpoint 38.15 · Market Expectation 34.959.2% Above Estimate ▲
- Adjusted Gross Margin86.25%
Floor for the Year · Q4 87.0% · Year-Ago 45.7%0.75 Pt Contraction ▼
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±9.6% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Core Data Center$18.0 BShare 33.2%
- Cloud Memory$16.3 BShare 30.0%
HBM mix rose, margin held flat.
- Mobile & Client$13.1 BShare 24.2%
- Automotive & Embedded$6.82 BShare 12.6%
Key Metrics
Adjusted Free Cash Flow
$33.2 B
Press Release
Operating Cash Flow
$44.0 B
Press Release
Net Capital Expenditures
$10.8 B
Press Release
Cash and Investments
$73.5 B
Press Release
Noncurrent Customer Contract Liabilities
$12.9 B
Press Release
Inventories
$10.4 B
Press Release
Shares are computed over the segment total: $54.2 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We do not have line of sight to when supply and demand will return to balance. We expect memory and storage supply-demand conditions to be much tighter in fiscal 2027 and 2028 than they were in 2026. More than 75% of our output is already committed for 2027.”
- No Line of Sight to Balance
- Over 75% of 2027 Output Committed
- Q1 As the Margin Floor
Summary and Review
Summary
Micron reported fiscal Q4 revenue of $54.23 billion. That is up 379% year over year and 6.4% above the $50.97 billion market expectation. Adjusted EPS came in at $33.42 against an estimate of $31.35, a 6.6% beat. Adjusted gross margin hit a record 87.0%. All three metrics cleared the top of the company's own guidance range. The Q1 revenue target beats expectations by 8.2%, so all three gates are open.
Even so, the stock first rose 2.2% after hours. It gave back that gain during the earnings call. As of 17:59 ET it was down 0.7%. Options had priced a 7.7% move in either direction; the reaction stayed well inside it. The sticking point was margin: the Q1 target is 86.25%, and the market wanted a bit more. The market did not read this report as a growth story. It read it as a margin story.
We rate the quarter as strong and keep the score at 86. Revenue, earnings and guidance all beat by 6-9%; all three gates are open. The call eased the demand concern: more than 75% of 2027 output is already committed. On the other hand, Q1 margin was described as the floor for the year. Inventory days rose to 129, and operating expenses are climbing fast. These caveats keep the score off the top of the band. We do not adjust the score for the stock reaction.
Full Review
Growth now comes from both price and bits.
The revenue ladder over five quarters is clear: $11.3B, $13.6B, $23.9B, $41.5B and $54.2B. Adjusted EPS rose from $3.03 to $33.42 over the same period. Gross margin climbed from 45.7% to 87.0%, a 41.3-point gain in one year. According to the prepared remarks, DRAM prices rose in the high-teens percentage range in the quarter. DRAM bit shipments grew in the mid-single digits. In NAND, prices rose about 30% and bit shipments about 10%. So most of the growth still comes from pricing. DRAM revenue was $39.8B, or 73% of the total. NAND revenue grew 526% year over year to $14.1B. Data center SSD revenue alone approached $10B. That is more than two-thirds of NAND revenue. On the call, Mehrotra said 2027 and 2028 will be much tighter supply years than 2026. He added that Micron has no line of sight to when supply and demand return to balance.
Read the guidance through the weekly run rate.
Fiscal 2026 was a 53-week year. Q4 ran 14 weeks, while Q1 will run 13 weeks. That makes the headline target look smaller than it is. Q4 weekly revenue was $3.87B. The Q1 target implies $4.73B per week. The weekly run rate rises by about 22%. The EPS target of $38.15 is 9.2% above expectations. The gross margin target is 86.25%, 0.75 points below Q4. Compared with 45.7% a year earlier, it is still an extraordinary level. The company says higher incentive pay booked in Q4 was absorbed into inventory. That cost will flow through as those goods are sold in Q1. Management describes Q1 as the gross margin floor for fiscal 2027. CFO Mark Murphy made it explicit on the call: margins will be higher in later quarters. What the market balked at was that this target fell short of expectations.
Cash surged, and customer deposits hit the balance sheet.
Operating cash flow was $43.97B in the quarter. Net capital spending was $10.77B. Adjusted free cash flow was $33.20B, versus $0.80B a year earlier. Cash and investments rose to $73.48B. Debt stands at $5.2B, leaving net cash of $68.3B. Noncurrent customer contract liabilities jumped from $0.57B to $12.90B in three months. These are deposits under strategic customer agreements. The company reports this cash in financing activities, not in free cash flow. Signed agreements now total 26. According to the call, they cover more than 35% of revenue through 2030. Customer commitments total $32B, mostly cash deposits. Remaining performance obligations are about $150B. Inventory rose to $10.37B, and inventory days rose nine to 129. See the cash flow guide.
HBM and the data center sit at the center.
The largest business unit is now Core Data Center: $18.0B, up 56% sequentially. Cloud Memory ranks second at $16.3B. Its margin held flat at 83%. The reason is a higher mix of lower-margin HBM. The company says HBM revenue grew faster than total revenue. Agreements covering most of its calendar 2027 HBM bit supply are complete, with significant year-over-year price increases. That narrows the margin gap between HBM and standard DRAM. Micron is also working with NVIDIA on NVHBM, the first custom HBM4E implementation. The 2027 HBM sell-out we listed as an expected development last quarter is now a fact. The HBM4 ramp is on track. Cleanroom preparation at the Singapore HBM packaging facility is ahead of plan, with first output expected in early 2027. About half of Mobile & Client revenue came from 1-gamma products.
Next quarter, watch a single number.
Fiscal 2027 capex is rising. About $25B is planned for the first half, and the second half will be higher. Operating expenses will rise by about $2.5B over the year. That makes gross margin the one metric that carries the story. Management called Q1 the floor and expects higher margins after it. Here is the rule: if the Q2 target is above 86.25%, pricing power is intact. If it is below, supply is catching up and the cycle may be turning. A second check is inventory days. A move below 129 would show tight supply holds in practice too. Capital returns will rise too. Murphy said that after December 9, 2026, Micron expects to return all excess cash over time, mainly via buybacks. The current authorization is $2.2B; see the buyback guide. For the pre-earnings options view, see the Mercek preview.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- Revenue, earnings and Q1 guidance all beat expectations by 6-9%.
- The weekly revenue run rate rises about 22% in Q1The headline target hides this.
- Adjusted free cash flow was $33.2B, with net cash of $68.3B.
- 26 strategic customer agreements cover more than 35% of revenue through 2030, with $32B in commitments.
- Most of calendar 2027 HBM supply is sold, and more than 75% of total 2027 output is already committed.
- Data center SSD revenue grew more than tenfold year over year to nearly $10B.
Risks
6- The Q1 gross margin target of 86.25% fell short of expectationsManagement calls it the floor for the year.
- Most growth comes from pricingPrice increases may slow once supply catches up.
- Inventory days rose by nine to 129.
- Fiscal 2027 operating expenses will rise by about $2.5B.
- Second-half capex will exceed $25BThe burden grows if the cycle turns.
- The stock rose more than sixfold in a yearThe bar for expectations is very high.
What to Watch
6- Early OctoberSamsung's preliminary Q3 results, the first outside check on memory pricing.
- Late OctoberSK Hynix Q3 results and commentary on HBM supply.
- October 29, 2026Payment of the $0.15 quarterly dividend.
- December 9, 2026Increased capital returns begin; Micron will seek additional buyback authorization soon.
- ~December 2026Fiscal Q1 results; targets of $61.5B revenue and $38.15 EPS.
- Early calendar 2027First output at the Singapore HBM packaging site; Idaho ID1 fab starts mid-year.
Upcoming Earnings
To Understand This